Sweeping changes are on the horizon for the Pentagon’s acquisition system, and details are starting to emerge.
Defense Secretary Pete Hegseth’s Anticipated Speech: A New Chapter in Acquisitions?
On November 7th, Defense Secretary Pete Hegseth plans to deliver a speech outlining the Trump administration’s plans to overhaul the defense acquisition system. The event appears to be a sequel to Hegseth’s September 30th meeting with senior officers, this time replacing military leaders with top executives from across the defense industry – both major players and the burgeoning startup scene.
„Arsenal of Freedom”: An Exclusive Invitation for Industry Elites
„The Secretary of War invites your CEO and a plus one to attend his address on the Arsenal of Freedom,” reads an email to industry obtained by Breaking Defense, specifying the event’s timing as 2 p.m. on November 7th. The email later notes that the invitation is „only transferable to a COO or equivalent,” indicating Hegseth’s team wants only the highest-level executives in attendance.
Accelerated Reforms: New Players Stepping Up?
The tone Hegseth will strike in addressing the industry is unknown, but both he and other DoD leaders have made it clear they want to see new entrants rise to the occasion, potentially at the expense of major defense primes.
A number of reforms are expected to be announced during the speech, and rumors are flying fast. However, the reality is that Hegseth’s speech will mark an important milestone, but not the starting point, for acquisition reform, as both OSD and the services have been making changes since the Trump administration took office in January.
What has happened in the last 10 months and what to watch for ahead of Hegseth’s speech?
One major change expected to be announced by Hegseth involves how weapon sales are handled outside the Pentagon.
DSCA: From Policy to Acquisition and Sustainment?
According to Politico, (and subsequently confirmed by Breaking Defense) the Defense Security Cooperation Agency (DSCA), the Pentagon office that manages Foreign Military Sales cases, would move from the department’s policy office to its undersecretary of acquisition and sustainment.
This is a move that defense industry groups have pushed for in the past, hoping it would accelerate a process often criticized as being too slow. However, there have been concerns in the past that moving DSCA out of the policy sphere would remove the strategic thinking behind approving or disapproving arms sales and turn it into a purely logistical exercise.
„If this report is true, this would be a welcome development for industry,” Dak Hardwick, vice president for international affairs at the Aerospace Industries Association, told Breaking Defense. „Aligning these functions under Acquisition and Sustainment would accelerate the FMS process – an urgent priority given today’s threat environment.”
„Czars” for Key Programs: A New Oversight Structure?
Another change that may be in the works is the creation of a series of „direct report program managers” who would oversee key programs for the Air Force and Navy – but would report directly to Deputy Defense Secretary Stephen Feinberg, rather than service acquisition officials.
As Breaking Defense reported in August, these new „czar” roles would mirror the setup for Golden Dome and could include high-profile programs such as the B-21 Raider stealth bomber, the F-47 sixth-gen fighter, the Sentinel ICBM, and Navy submarine programs. According to sources, Vice Adm. Robert Gaucher, commander of naval submarine forces, is being considered for the submarine role, while Lt. Gen. Dale White, the Air Force’s military deputy for acquisition, has been considered to lead the Air Force effort.
Whether this change could be announced by Hegseth on November 7 is unknown.
What We Know About the Army’s Plans to Streamline and Consolidate
In April, Breaking Defense first reported that the Army was planning to rearrange and consolidate its 13 Program Executive Offices into a single-digit number. Politico confirmed this week that the 13 PEOs will indeed be consolidated, with the announcement expected to be part of Hegseth’s speech.
Consolidations and rearrangements include, but are not limited to, PEO Ground Combat Systems and PEO Combat Support & Combat Service combining in some areas, while PEO Command, Control, Communications, and Network, and PEO Intelligence, Electronic Warfare and Sensors plan to merge.
Since Breaking Defense reported on the possible changes in April, efforts have continued quietly, with the service canceling or downsizing programs and reducing the Army Futures Command by combining it with the Training and Doctrine Command (TRADOC) to create the new Transformation and Training Command. Both offices were led by four-star generals, and the leader of T2COM, Lt. Gen. David Hodne, is currently awaiting his fourth star.
Moreover, the looming acquisition overhaul was foreshadowed earlier this month when Army Secretary Dan Driscoll said a „major announcement” was coming soon, promising a „consolidation and streamlining of how we buy things in the Army” in the future. He added that the Army should adopt a more Silicon Valley-like mindset.
„Those groups have been, and that leadership has been so weak for so long, that we will try to emulate what works very well in the private sector,” Driscoll said at the AUSA conference. „So if you were to look at what made SpaceX or Tesla work very well, my impression is that it was combining manufacturers and engineers, putting them together on the floor. Forcing them to work together, and that speeds up the innovation cycle for us.”
Restructuring in the Air Force and Space Force
If the plan to create a czar for high-profile Air Force programs comes to fruition, it would be a major change in the service’s portfolio. But other efforts are also underway.
Service officials recently scrapped a Biden-era initiative called the Integrated Capabilities Command, which would have revised how the service sets requirements for the purchase of weapons systems. The Air Force now plans to integrate these functions into an existing structure known as the Future Air Force. More changes could be in store once General Kenneth Wilsbach, who was confirmed by the Senate on Thursday as the next Chief of Staff of the Air Force, takes office.
However, systemic acquisition changes may be more difficult to implement given the service’s lack of leadership in a key role. The post of Air Force Acquisitions Director, known as the Assistant Secretary for Acquisition, Technology and Logistics, has not had a Senate-confirmed leader since January. William Bailey is currently performing the duties of the post.
Unlike the other services, the Space Force has a relatively small number of acquisitions directors – although there are numerous civilian offices and military units that have the power to influence arms procurement requirements and processes. At the top is the Department of the Air Force Service Acquisition Executive for Space, who reports directly to the Secretary, which by law is a position held by the Assistant Secretary for Space Acquisition and Integration. The post is currently vacant, with Major General Stephen Purdy acting in the interim.
Purdy is scheduled to leave his interim post no later than January, to return to wearing only one hat as military deputy to the office – sooner if the Air Force can put in place a civilian deputy to take over by then, he told reporters at the AFA conference on September 24.
Purdy’s office has nine space acquisition officials reporting to him: seven Program Executive Officers under Space Systems Command, each responsible for a mission area, along with the directors of the Space Rapid Capabilities Office and the Space Development Agency.
A former Pentagon acquisition official said that, from what has been circulating in the press and in rumors, Hegseth’s intention may be to get rid of the SAEs and instead have PEOs report directly to service secretaries. However, the former official noted that this plan would not work for space acquisitions unless Congress agreed.
„Their reporting to the service chiefs would be a big change. I think that’s the way it used to be a long time ago, before Goldwater-Nichols, and it didn’t work well,” the former official said.
Moreover, the official said there is widespread speculation that the planned acquisition changes will include eliminating certain types of contracts, including cost-plus contracts – something former DAF SAE Frank Calvelli repeatedly told space PEOs to avoid during his tenure.
The Navy and Marine Corps Have Already Downsized
For the Navy, Secretary John Phelan has spent the past several months actively downsizing the service’s acquisition offices.
In August, Phelan closed several pre-existing offices focused on developing or acquiring new technologies, such as the Disruptive Capabilities Office established by former Secretary Carlos Del Toro. In their place, he established a Naval Rapid Capabilities Office and appointed Vice Admiral Seiko Okano, one of the service’s top uniformed acquisition officials, to head the new office.
In early September, SECNAV took steps to consolidate several offices focused on robotics and autonomous systems, directing the service to establish a portfolio acquisitions director in their place.
And late last month, Breaking Defense exclusively reported that Phelan was cutting a number of foreign affairs staff and installing a Chief of Naval Policy to completely replace what was the Deputy Undersecretary of the Navy for Policy.
